BitGo CEO confirms they halts Alameda’s wBTC redemption
The CEO of BitGo company confirmed that Alameda Research was trying to redeem $50 million worth of wrapped Bitcoin but failed to pass security verification.
BitGo is a digital assets custodian platform and also holds Bitcoin (BTC) against wrapped Bitcoin (wBTC). wBTC is actually Bitcoin pegged by Bitcoin. wBTC remains useful in the Ethereum Blockchain ecosystem to deal with crypto financial activities easily. In short, wBTC unlocks the new use case of Bitcoin.
On 15 December, During a Twitter space discussion, BitGo CEO Mike Belshe said that Alameda Research was trying to redeem 3,000 BTC but failed to pass the security check on BitGo, so BitGo halted the redemption process.
Belshe explained that Alameda Research was one of those companies which had never dealt with BitGo. Secondly, this company was under a very big downfall stage along with the FTX crypto exchange.
BitGo CEO also shared a screenshot, where an official (or maybe unofficial) from Alameda Research sent 3,000 wBTC to the wBTC burn address but the request was still in the pending zone because of the failure to pass BitGo’s security check.
So, we (Bitgo) held it up and said this is not what a burn looks like and we need to know who this person was,” Belshe said. “While we were holding it, waiting for a response on those issues, they (Alameda) went bankrupt and of court, everything halted.”
Here BitGo CEO also revealed that the person, who was trying to redeem wBTC, was unaware of the concept of wBTC burn & actual BTC redemption process, which was unusual.
At present, BitGo holds 202,255 BTC in custody against 199,238 WBTC in circulation. Here 3,000 BTC difference occurred majorly because BitGo burned those 3,000 wBTC but halted the withdrawal of 3,0000BTC.
According to reports, Alameda Research was one of the biggest affiliated companies of the FTX exchange. FTX exchange founder & former CEO Sam Bankman-Fried (SBF) was 95% owner of Alameda Research. And FTX secretly sent more than $1 billion worth of funds from FTX to Alameda. But the whole ecosystem of these two companies collapsed badly and the company filed for bankruptcy on 12 November.
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